ERISA Lawsuit Settlements

ERISA Law

ERISA is the Employment Retirement Income Security Act of 1974.

ERISA regulates many employer-sponsored benefit plans such as retirement, health insurance, and long term disability insurance.

ERISA protects employees by:

  • Requiring plan administrators to be transparent and keep employees informed;
  • Preventing mismanagement by defining standards that plan administrators and other fiduciaries must follow; and
  • Protecting employees’ rights to receive retirement funds they have been promised.

When an employer, plan manager, or another fiduciary fails to comply with the terms of ERISA, an employee may pursue an ERISA lawsuit to enforce their rights. Likewise, employees can pursue legal action if ERISA benefits are wrongfully denied.  

An experienced ERISA attorney can help you pursue a favorable ERISA lawsuit settlement.

What Is an ERISA Lawsuit?

The most common ERISA actions are:

  • Claims to recover benefits owed to the employee, and
  • Claims alleging breach of fiduciary duty.

ERISA also outlines minimum due process requirements that plan administrators must follow when reviewing claims. These requirements specify the time within which the plan must respond to the claim, the type of notification the plan must provide, and rules regarding appeal procedures.

Claims to Recover Benefits

Your employer may sponsor a number of benefit plans that are subject to ERISA regulation. Under ERISA, you can challenge a denial of benefits under such plans by showing:

  • That you made a proper claim for benefits;
  • That you are entitled to the benefit under the terms of the plan; and
  • That you were denied the benefit.

If you have made a claim for benefits that you believe was wrongfully denied, talk to an ERISA attorney as soon as possible about your options.

Below, we discuss several types of benefits that are commonly subject to ERISA lawsuits.

Retirement

ERISA rules require retirement plan sponsors to adequately fund the plan. ERISA also sets rules governing vesting, plan participation, and benefit accrual. However, employees can end up in disputes with plan administrators over issues like:

  • Benefit calculations,
  • Vesting issues,
  • Lack of plan funding, and
  • Eligibility.

If you have been denied retirement benefits to which you believe you are entitled, an ERISA lawyer can help.

Disability

Many employers sponsor long-term disability insurance as part of your benefits package. If you become disabled so that you can no longer work full time, you may be entitled to either short- or long-term disability payments through this insurance.

However, to avoid paying, the insurer may dispute your claim that you are unable to work or argue that you can work in a different type of job. If this happens, an attorney can help you gather evidence to support your claim.

Life and Health Insurance

Other plans that your employer may sponsor include life and health insurance. If you have had claims for either of these benefits wrongfully denied, an ERISA lawyer can help you appeal.

Claims for Breach of Fiduciary Duty

The second type of common ERISA claim concerns breaches of fiduciary duty. A fiduciary duty is an obligation someone has to act in the best interests of another party. This duty often arises when an individual or company handles someone else’s finances.

When it comes to ERISA plans, fiduciaries can include both those named in the benefit plan—such as the plan sponsor—and unnamed individuals who have discretionary authority or give advice about managing the plan or its assets. 

ERISA fiduciaries have a number of duties including:

  • Acting in the interest of the plan participants and their beneficiaries;
  • Complying with the terms of plan documents;
  • Avoiding conflicts of interest and self-dealing;
  • Monitoring the plan’s performance; 
  • Managing funds prudently and diversifying investments; and
  • Keeping employees informed about the plan and its performance.

To prevail on an ERISA fiduciary duty claim, you must prove:

  • That the defendant(s) are fiduciaries;
  • That the defendant(s) breached a fiduciary duty; and
  • That the participants or the plan suffered loss as a result.

If an ERISA plan fiduciary has breached a duty, it is important to hold them accountable and protect the integrity of the plan. An experienced ERISA attorney can help you determine whether you should pursue this type of claim.

What Is the Process for an ERISA Lawsuit?

Before you can file an ERISA lawsuit, you typically must exhaust any available administrative remedies. This means that you must make every attempt to resolve your claim with the plan administrator internally by complying with the plan’s claim and appeals process. For example, if your plan denies a claim and gives you 60 days to appeal the denial internally, you cannot file an ERISA lawsuit until after your claim is denied on appeal.

After you have exhausted your administrative remedies, you can file an ERISA lawsuit in federal court.

For claims based on breach of fiduciary duty, you have either six years from when the “last act” of the breach is committed or three years from when you had actual knowledge of the breach. For claims based on a denial of benefits, the limitations period is often set by the plan itself, so your time to file may be very brief.

In many cases, you will be able to reach an ERISA lawsuit settlement before going to court. If you do not settle, the case will be examined by a judge in a bench trial. Jury trials are not available for ERISA claims. The court will review the administrative record and reach a decision.

If the judge does not rule in your favor, you can appeal that decision to the U.S. Court of Appeals.

What Is a Typical ERISA Lawsuit Settlement?

As with practically every cause of action, there is no “typical” settlement amount. The amount you can get in an ERISA lawsuit settlement can vary drastically based on your individual circumstances. An ERISA attorney can advise you about the potential value of your particular case.

For now, let’s focus on the types of remedies you may obtain in an ERISA settlement.

Relief for Denial of Benefits

When your claim is based on a denial of benefits, ERISA does not permit you to recover consequential or punitive damages. Rather, your remedy is to recover the benefits that were wrongfully denied under the terms of the plan. Your recovery may include both future benefits and any back benefits owed to you. The plan may also be required to pay your attorney fees.

Relief for Breach of Fiduciary Duty

When your claim is for breach of fiduciary duty, several remedies may be available depending on the basis of your claim. Most of these remedies will benefit the plan as a whole, rather than the individuals filing suit.

However, in the case of retirement plans, you may be able to recoup losses to your own defined benefit account caused by the breach. Potential remedies for the plan as a whole include:

  • Recovery of monetary losses to the plan resulting from the breach;
  • Imposition of a constructive trust;
  • Injunctions; and
  • Specific performance.

You may also be able to recover attorney fees.

Why Hire an ERISA Lawyer?

ERISA claims can be complex due to the many procedural rules involved. There are often very short timelines for appealing a denied benefits claim, and you may face multiple levels of administrative appeals. You need a skilled and knowledgeable attorney in your corner to navigate these procedural hurdles.

If you have been notified that your claim for retirement, disability, or other benefits has been denied, contact John Peace at Peace Law Firm as soon as possible. Peace Law Firm is a full-service ERISA law firm that works exclusively for individuals.

We help real people defend their rights against employers and insurance companies and fight to get the benefits they deserve.

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